Bush may end federal tech funding program

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February 12, 2006 (IDG News Service) -- A federal program that funds "high-risk" technologies is at high risk of going out of business if Congress approves President Bush's proposed federal budget for next year.
Since it started awarding grants in 1990, the Advance Technology Program (ATP) has distributed some $2.2 billion in funding to projects focusing on a range of subjects, including information technology, nanotechnology, biotechnology and advanced materials.
For the past several years, the Bush administration has tried to eliminate funding for the program, and this year it may succeed.
The program received $80 million this year from Congress, but that was only about half the money the program received in the prior year, and only enough to fund previously approved projects.
"I think this may be the year in which ATP dies its death," said Kei Koizumi, director of the research and development budget and policy program at the American Association for the Advancement of Science in Washington. The fact that there are no new grants going out this year means the program is "just closing out its existing commitments," he said.
In the budget request for fiscal year 2007 that it sent to Congress this week, the Bush administration said the private sector should provide start-up financing, not the federal government: "Given the growth of venture capital and other financing sources for high-tech projects, there is little evidence of the need for this federal program."
ATP's IT projects included work on handwriting-recognition programs and software development in areas such as Cobra fault tolerance and cognitive learning systems.
The ATP program is seen by some as a form of corporate welfare, but Michael Borrus, an ATP advisory board member and executive in residence at venture capital firm Mohr Davidow Ventures in Menlo Park, Calif., defended the program, saying that the ATP takes on projects that show promise but are at too early a stage to attract venture capital funding. "It's a classic capital market failure," he said.
The ATP program is part of the National Institute of Standards and Technology (NIST). The Bush administration is recommending, however, a 24% increase in the NIST budget for its core programs, from $431 million to $535 million. The increased spending would go toward information security, an area where the NIST's work has an impact. For instance, it developed the Advanced Encryption Standard (AES) to replace the Data Encryption Standard. DES is 56 bits long, while AES keys can be as long as 256 bits. It's also doing work in voting security and biometric standards used in identity cards.
Bruce Schneier, founder and CTO of Counterpane Internet Security Inc., said that while NIST does good work in areas suchas in voting security, it has no enforcement capability and no way to ensure that its security developments are implemented. He said that he would like to see the federal government use its purchasing power to require companies to meet certain security standards. "We all benefit when a big player uses its purchasing power," he said.

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